18 November 2008
HeidelbergCement comments on press reports about VEM
VEM Vermögensverwaltung holds a minority interest of 25.19% in HeidelbergCement. The current situation at VEM Vermögensverwaltung has no impact on the operations of HeidelbergCement. HeidelbergCement has neither financial relationships to VEM nor exist credit agreements at HeidelbergCement with reference to VEM (no cross-default provisions).
In the first nine months of the year, HeidelbergCement increased turnover by 49% to EUR 10.8 billion. Operating income grew 15.6% to EUR 1.6 billion. Based on this performance, the company expects to achieve its 2008 turnover and result targets.
At midyear, HeidelbergCement reacted to the global economic slump with its “Fitness 2009” program. In North America and the United Kingdom, which have been massively affected by the financial and real estate crisis, capacities were aggressively trimmed early on to reflect the weaker market situation. The resulting cost savings will therefore already begin to make a positive difference in results this year. HeidelbergCement has taken effective measures to reduce working capital and has significantly cut its capital expenditure. The company will maintain its high degree of discipline and continue to hold steady on this path. The free cash flow generated will be used to minimise debt.
Almost all of the government-sponsored economic stimulus programs that are being implemented worldwide to counteract the spread of the financial crisis to the real economy go hand-in-hand with impetus for the building materials industry. This will provide an additional contribution to cash flow growth.
The majority of the refinancing requirements due in 2009 in the amount of EUR 900 million is covered by committed and confirmed credit lines and cash at bank and in hand of more than EUR 1 billion. Thus, even without access to the money and capital markets or the granting of fresh credit lines, the company’s liquidity base is sound. Repayment of the final EUR 5 billion tranche is due in May 2010. All associated refinancing measures are currently under active review.